perfidy

In a followup to my thoughts the other day about the self-destructive tactics of the music bidness, the New York Times has an interesting article about the sunset of the album as the dominant commercial musical medium. Last year, digital singles outsold physical albums for the first time, which is bad news for the labels as their per-unit take on digital singles is several orders of magnitude lower than on traditional album sales. In a fascinating turn of events, the Times article also profiles a young group who have signed a singles deal with Universal, and who are thrilled at the low-risk exposure they'll get for recording three to five songs, total, for a major label. The majors in turn are contemplating turning this sort of contract, previously reserved for novelty records and one-off all star fiascos, into one of their most common deal structures. This is a surprising and ironic turn of events.

Well, perhaps it's not surprising to you, but it sure as hell is to me. Not six years ago I sat in a room with the management team of the label group I worked for and listened to them announce that we would be getting out of the singles business forever.

To be fair, it made sense at the time. Back in early 2001, the music industry was even farther away then it is today from figuring out how to make money off of digital downloading, and sales of physical singles had dwindled. The singles floor racks of the 1960s had shrunk in the 1980s to a singles wall, and by the turn of the millennium was just a couple singles next to the checkout counter. Albums ruled the day. All across the industry, labels were getting out of the singles business as sales dried up. Sure, there were a couple markets where they still moved, but for the most part, it was dead as disco. Digital media wasn't even a blip except insofar as it could help market traditional CDs.

And that's the central insight that I think is missing from the usual narrative of how the music industry is hidebound, venal, greedy, etc. etc. etc. (all true anyway no matter what, but still...). For fifty years or more, the music industry has been able to dictate, or at worst, adapt readily, to major shifts in media. This is because new form factors came along at a slow pace, and were never all that disruptive to the current status quo. The grooved record had more than three quarters of a century in the sun, from its introduction in the early years of the 20th century to the late 1970s, before it was supplanted by the tape. Tapes too, had a good twenty-year or more run before they were indisputably tackled by the compact disc. And the compact disc, again, had about twenty years between its major commercial adoption and the current seven-year slow strangulation the industry is currently undergoing.

And this time, it's not just form factor and playback technology that's changing. This time it's the entire distribution chain that's been upended, the very business processes that the labels and their affiilated industries (manufacturing, distribution, commercial radio, retail) have built their success around for, in some cases, a hundred years. That's hard to understand, much less accept. I can't imagine any industry agile enough to turn on a dime like the record industry should have when Napster first came on the scene, so a few years delay in getting their act together is no surprise. But now that seven years have gone by, it's still pretty clear that the industry as a whole is still trying to sell buggy whips to consumers who have never even seen a horse.

As for the irony, I do find it ironic that what seemed like a very sound business decision in 2001 - shutting down the singles shop because singles don't sell - turns out to be an early indicator that the music industry was not only unequpped to adapt to the implications of downloadable music, but at the time the technology matured were actively shutting down the only parts of their business that could even comprehend any part of what the future would hold.